Cloud Believers Beware of the Devil’s Advocate

At parties I advocate an opposing or unpopular cause for the sake of argument. I do this to hone my debate skills.

You’ve also probably seen hints of me dressed in an Armani suit, lurking in the shadows outside of the offices, back alleys and parking lots of high tech and medical device companies. I wait in ambush, whispering the dangers of cloud integrations into the ears of easily persuaded executives, operation and engineering managers, seeing who I can ensnare into adopting on-premise solutions. I do this for my own amusement.

I can be so devilish sometimes.

The truth is I know from first-hand experience that on-premise integrations are much more complicated than cloud integrations because my overlord has been running on-premise for centuries and it’s caused us eternal suffering. Big Red’s horns start spinning when he talks about how complicated on-premise integrations have crippled his operation and apocalyptic business strategies.

And you know the old saying, “misery loves company”; well, so does anyone who uses on-premise solutions.

Most product development companies need both enterprise resource planning (ERP) and PLM integrated to streamline product design processes. ERP and PLM systems are complimentary tools that can communicate with each other, yet support distinct business needs. PLM is designed to manage a product from initial documentation as it is revised and released for production. ERP uses the product truth (product data that has been determined in a PLM system) to help companies manage production resources and financials among other business activities.

Let’s look at this graphic above. In the top scenario, the PLM system is a Software as a Service (SaaS) system. In the other integration scenario, an Enterprise Resource Planning system is integrated to an on-premise PLM system. In both cases, none of the applications reside on the same server or in the same building. Is it in fact true, that the first ERP & PLM integration scenario is more complex (or more prone to turning to spaghetti) than the second?

The same data is going back and forth, the same data is still going over the Internet. Therefore it’s hard to see why this should lead to any difference in integration complexities. The primary difference is not actually technical, but one of control.

The foolish notion that the integration of cloud PLM with ERP is more difficult than on-premise is just a mistruth that I concocted; in fact, on-premise integrations are inefficient and expensive compared to cloud integrations.

Fib number 2: Having complete control over your solution is key to your business success.

Here’s the truth: if systems were all about control, the SaaS platform would never have become popular. Certainly, the customer has less control under the first scenario illustrated above, but they also gain things such as the fact that the vendor, who knows the software better than anyone, is in control of the instance and can fix issues faster than if the customer hosts the server. Upgrades are automatically performed by the software vendor, on hardware that the software vendor owns, and in the case of a multi-tenant SaaS, the software vendor makes the upgrade of a bug fix one time for what may be 1000 customers on a single server—meaning the cost of upgrading and bug fixing is far lower than if the applications were distributed to the customer locations.

Think about this: if you had car troubles and you chose to fix your car yourself, certainly you have more control over the process. Hurray. How fun. However, it might take you all day to fix your car. If you took it to a mechanic it might take few hours while you went and got breakfast and worked. You see, the opportunity cost of having control costs more than having someone else manage it. Fixing your car yourself means you’re not spending time on your job and making money.

(Source: beyondplm.com)

Fib 3: A single ERP application can eliminate all of these other applications, greatly reducing need for integrations.

Wrong! No single system from a single software vendor can ever meet all of a company’s needs. SAP and Oracle started out by offering ERP systems, but one look at their solution stacks today, and this should be clear. They offer a very broad number of solutions, with ERP being just one of many. The lesson after studying decades of IT development, is that integration, rather than pre-integrated systems, are here to stay. And if you’re a product development company, your ERP system needs a PLM system.

So, in conclusion dear friends I'm pleased to meet you, I hope you guess my name. Oh, wait a minute, I already told you—I’m the Devil’s Advocate when it comes to telling you cloud PLM integrations are complicated.